Home buying - 300K house or 400K house
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Posted on: 19-04-11 15:49:57
Quote:
Originally posted by ashedfc
Another update "This time from Melbourne- Home property prices plunge" http://www.heraldsun.com.au/ipad/melbourne-home-property-prices-plunge/story-fn6bfkm6-1226039937945
S&P revises US outlook to Negative; Gold shoots up just on the news..
Canada's turn is coming, now its just a matter of time....
Govt can always devalue Canadian dollar. But they will not allow the market to crash. Yes I am mean in real terms Market may crash( in terms of Gold etc).
But for average person who earn & live on Lonnie. No effect will happen. I have seen this in UK.
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infocan
Quote:
Originally posted by ashedfc
Quote:
Originally posted by infocan
Govt can always devalue Canadian dollar. But they will not allow the market to crash. Yes I am mean in real terms Market may crash( in terms of Gold etc).
But for average person who earn & live on Lonnie. No effect will happen. I have seen this in UK.
Its the average person who gets slaughtered.. on contrary high net worth individuals are affected the least.
In other words:- A devalued Loonie means a reduced purchasing power for average person, & day to day essentials gets expensive, which puts a squeeze on a persons budgeting. Its already evident by the gas price (complains are already started coming, & its not even $2/lit yet, which is coming very soon.)..
As far as the market crash goes (average person is not in the markets, average person is busy paying his bills & living paycheque to paycheque), those who are, they need to reposition their holding/asset allocation in correlation with currency adjustments.
As far as UK goes, the general poverty level in UK is much higher than that of Canada.
I was expecting a better reply from you. In case Govt of the day have to make choice between high inflation & crash on property prices.
It is no brainer. Govt will choose high inflation( 4-5%). UK did it. I am no reason to believe that Canadian govt will do otherwise.
As crash result in deadly cycle of big layoffs of all related housing industry.
Govt can easily force banks not to go for reposseion. Can give 1 year holiday breaks on mortage payment. Allowed people to go 3 months behind in thier mortage payment etc etc... Bascially what I am saying is govt have lot of levegare to do things if it wants to..
( Off topic on UK. You said poverty level is much higher than Canada. I disagree. One can maintain same quality of life in UK as
in Canada by earning 20-30% less in UK. This is my personal experience. Create new topic I can tell you so many points of Europe compare to Canada. Heating,phone,car insurance, housing maintaince , english garden/country side compare to here life etc…..)
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infocan
Sorry for sending to private email but mistake..
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Here are few more ideas to keep pumping RE:
print money and give 500K to buy home?
waive off some %age mortgage?
give tax break to home owner?
allow baby fingerprint in mortgage papers along with parent?
Everything is not controlled by Govt. Govt is out of bullets.
US govt already tried lot of socialist idea to bring RE back but it did not work.
You already have seen Jim F and BOA reaction in last few months/a year? There is more life than pumping bubble.
Quote:
As crash result in deadly cycle of big layoffs of all related housing industry.
Govt can easily force banks not to go for reposseion. Can give 1 year holiday breaks on mortage payment. Allowed people to go 3 months behind in thier mortage payment etc etc... Bascially what I am saying is govt have lot of levegare to do things if it wants to..
Quote:
Originally posted by rahul_singh23
Sorry for sending to private email but mistake..
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Here are few more ideas to keep pumping RE:
print money and give 500K to buy home?
waive off some %age mortgage?
give tax break to home owner?
allow baby fingerprint in mortgage papers along with parent?
Everything is not controlled by Govt. Govt is out of bullets.
US govt already tried lot of socialist idea to bring RE back but it did not work.
You already have seen Jim F and BOA reaction in last few months/a year? There is more life than pumping bubble.
Quote:
As crash result in deadly cycle of big layoffs of all related housing industry.
Govt can easily force banks not to go for reposseion. Can give 1 year holiday breaks on mortage payment. Allowed people to go 3 months behind in thier mortage payment etc etc... Bascially what I am saying is govt have lot of levegare to do things if it wants to..
Rahul,
You may right. But what I suggest is something that have actually happen in UK. So far Canadian Govt have not done but can do if requires…
Typically the volumes of house sale activity get reduced. As everyone is struck. But prices Will remain high
Crash only happen when people are forced to sell their houses due to fear of Repossession, with no jobs. Else everyone struggle to hold on, by renting basement, doing Part time jobs etc… Even people can rent house and move to basement themselves-). But they Will not sell at low rate. It is simple. While builders will not build new homes in case they find inventory Is not selling…..
So What I feel, people have only two choices
1> Either buy house/townhouse/condo by taking large mortgage.. move on life
2> Else keep living in basements/apartments. Put big banner around your neck of DEBT ISSUE with Bell in hand and sing song in city centre, by telling people, as bad it is in Canada about potential debt issue & coming crash -)
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infocan
Quote:
Originally posted by ashedfc
High inflation is more deadly than one can imagine (many of us have not witnessed high inflation; but keep in mind its coming). It looks like Govt's in the west are choosing high inflation, & it can easily shoot interest rates to much higher level than one can imagine. This will drastically increase mortgage payments, & all other payments (including gas/heat/hydro/food/etc. etc) causing defaults, as a lot of homeowners are on variable rate mortgage. And salaries will not keep pace with the increase in cost of living. Foreclosure (or not) is a technical issue. What really happens is, it reduces the individuals spending capacity, & thereby causes reduced GDP, or negative GDP, which causes loss of jobs, & even less spending power. Its is spiral effect, which US is already in.
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Not so fast. If these are the dire consequences then govt will not raise the rates so fast. So far govt of Canada did not print the money like US did. Canada did not have natural disasters nor there is political uncertainity like in middle east. It does not carry the level of debt that so called big brother does. Canadian Banks of have been as much responsible as banks in emerging economies.
Are these negative sentiments because of missed opportunity of real estate investement?
You are expecting 200 run from last batting pair and no room for error...
http://www.theeconomicanalyst.com/content/more-data-canadian-savers-interesting-ontario-renter-survey
Some key points:
54% of Canadians find it a real struggle or impossible to save
38% have no savings at all
Of those who we are not currently saving any of their income, 39% said this was due to the expense associated with servicing pre-existing debts.
The good news is that 30% of Canadians have 4 months or more of living expenses set aside as an emergency fund.
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You are expecting too much from the people who are living with 0 margin but we have 70% home ownership. Bank love this crowd who religiously donate big paycheck every month even will continue after they retire (5/35,0/40).
Why did this idea not work in USA?..............Negative equity, mortgage is bigger than market value, LOC, other kind of debt, higher taxes are the problem. There is no cushion/saving for risk management. It's funny that we have same symptoms but not accepting the disease.
Quote:
So What I feel, people have only two choices
1> Either buy house/townhouse/condo by taking large mortgage.. move on life
2> Else keep living in basements/apartments. Put big banner around your neck of DEBT ISSUE with Bell in hand and sing song in city centre, by telling people, as bad it is in Canada about potential debt issue & coming crash -)
Quote:
Originally posted by rahul_singh23
You are expecting 200 run from last batting pair and no room for error...
Till the interset rates are low. Bowler is blowling straight slow normal ball. One can bat forever till then. Keep batting. No one is alone in batting
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infocan
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